Week 10 (2017)

Week of March 6, 2017 through March 10, 2017

Lord & Taylor, LLC v. White Flint, L.P. (Harris 3/7/2017) Applying Maryland law, the Fourth Circuit held that for commercial properties, where easements and use restrictions protect the income-producing capacity of the property, damages for a violation of those easements and restrictions may only be measured in terms of lost profits. The court also addressed other issues involved with calculation of damages, finding anticipated future profits from a redevelopment plan were not reasonably certain, and an executive responsible store design and construction was a lay expert because he developed his testimony about construction costs based his “previous experience” and “personal knowledge.” Because the Court found no error in the district court’s management of the case, they affirmed the calculation of damages. Full Opinion

Christopher Iames v. Commissioner of I.R.S. (Wilkinson 3/7/2017) The Fourth Circuit held that the prohibition on collection due process (“CDP”) liability review is not limited to prior judicial challenges or collection issues. Although the court did not specify what types of administrative hearings may or may not activate the bar generally, it did find that a hearing before the Office of Appeals of the Internal Revenue Service activates the bar on CDP liability review. Accordingly, the Court affirmed the decision of the Tax Court that appellant was prohibited from disputing his liability a second time. Full Opinion

Xochitl Velasco Padilla v. Joe Troxell (Duncan 3/8/2017) As an issue of first impression, the Fourth Circuit construed the consent defense under the Hague Convention on the Civil Aspects of International Child Abduction, as implemented by the International Child Abduction Remedies Act. The court determined that the application of the consent defense depends a considerable extent on factual and circumstantial determinations. Specifically, the petitioner’s formal or informal statements and conduct before removal should be examined to ascertain the petitioner’s subjective intent. The Court held that petitioner in this case consented to the removal of her child and affirmed the district court’s decision to deny the appellant’s petition for the return of her child. Full Opinion

Robert Roland v. USCIS (Thacker 3/8/2017) The Fourth Circuit held that the United States Citizenship and Immigration Services’ no-risk determinations are discretionary, and therefore unreviewable under 8 U.S.C. § 1252(a)(2)(B)(ii). Rejecting appellants’ argument that the district court possessed jurisdiction because their claims involve legal and constitutional issues and they did not challenge the agency decision itself, the Court affirmed the district court’s decision to grant summary judgment based on lack of subject matter jurisdiction. Full Opinion

US v. Charles Douglas (Traxler 3/9/2017) The Fourth Circuit held that imposition of the special condition to undergo a sex-offender evaluation in order to obtain supervised release is reasonably related to the statutory sentencing factors in 18 U.S.C. § 3583(d)(1) and does not involve greater deprivation of liberty than reasonably necessary where an offender is convicted for failing to register as a sex offender under the Sex Offender Registration and Notification Act, even if the prior sex offense is temporally remote. As such, the Court determined that the sentence imposed by the district court was reasonable and affirmed the judgment of the district court. Full Opinion

US v. Saundra White (Duncan 3/9/2017) The Fourth Circuit held a defendant’s showing for a Franks v. Delaware hearing must be more than conclusory, and must include specific proof the affiant knowingly and intentionally, or with reckless disregard for the truth included false statements in his affidavit. The court also examined issues relating to sentencing, finding the government misrepresentation enhancement under U.S.S.G. § 2B1.1(b)(9)(A) is appropriate where tax payments are solicited through the fraudulent IRS notices and voicemail, even if the solicitations do not directly state the offender is acting on behalf of a government taxing authority, and for the purposes sophistication-means enhancement under U.S.S.G. § 2B1.1(b)(10)(C), sophistication refers to especially complex or intricate planning, not the skill with which a scheme is executed. Accordingly, the Court affirmed the judgment of the district court. Full Opinion

Virginia Electric and Power Co v. Bransen Energy, Inc. (Thacker 3/9/2017) Applying Virginia law, the Fourth Circuit held delivery of coke breeze and waste coal that failed to meet contractually required specifications and environmental regulations constituted a material breach of contract. The Court accordingly affirmed the district court’s rulings at summary judgment and relating to damages. Full Opinion

US v. Dominic McDonald (Shedd 3/9/2017) The Fourth Circuit held that sentencing under the Armed Career Criminal Act is harmless error where the district court explicitly states it would given the same sentence absent the ACCA, so long as the sentence is substantively reasonable. Rejecting the appellant’s argument that his sentence was substantively unreasonable, the Court affirmed. Full Opinion

Neal Blankenship v. Consolidation Coal Company (Niemeyer 3/9/2017) The Fourth Circuit held that Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) does not preempt limitations for state causes of action where the plaintiff’s claims do not assert a basis for recovery of remediation costs with respect to a hazardous waste site, or where the claims are for releases of hazardous substances that are federally permitted. The Court also noted that a plaintiff should reasonably know damages have been caused and the CERCLA statute of limitations begins to run where a notice and a permit application for a dewatering operation have been published, the operation is openly implemented, and the operation is discussed in local newspaper articles, regardless of whether the plaintiff had actual knowledge of the operation. Further rejecting appellants’ arguments that the statute of limitations was tolled under Virginia law, the Court affirmed the decision of the district court to grant summary judgment as to the appellants’ claims. Full Opinion

Highlight Case

Christopher Iames v. Commissioner of I.R.S., No. 16-1154

Decided: March 7, 2017

The Fourth Circuit held that the prohibition on collection due process (“CDP”) liability review is not limited to prior judicial challenges or collection issues. Although the court did not specify what types of administrative hearings may or may not activate the bar generally, it did find that a hearing before the Office of Appeals of the Internal Revenue Service activates the bar on CDP liability review.

Facing proposed a civil penalty of approximately $61,000 for a reporting violation, appellant filed a protest with the Office of Appeals challenging the penalty. The Appeals Officer reviewed the file, and attempted to confer with appellant’s counsel, but was he unresponsive. As a result, the officer sustained the penalty and closed the case. The Commissioner then initiated its administrative collection process and informed appellant of his right to a CDP hearing under Section 6330 of the Internal Revenue Code. After appellant requested a CDP hearing to challenge his tax liability, the Office of Appeals sustained the Commissioner’s collection action. The Notice of Determination explained that appellant was barred from disputing his tax liability in the CDP proceeding because he was given the opportunity to raise any relevant issues relating to the unpaid tax in the earlier hearing. Appellant petitioned the Tax Court to review the Notice of Determination. Appellant brought this appeal after the Tax Court granted summary judgment in the Commissioner’s favor based on the finding that appellant had a prior opportunity to challenge the existence and the amount of the underlying liability.

On appeal, the Fourth Circuit held sections 6330(c)(2)(b) and 6330(c)(4) precluded CDP review of appellant’s tax liability because he had the opportunity to dispute liability with the Office of Appeals in the earlier hearing. The court noted both provisions incorporate the principles of claim preclusion and issue preclusion in order to prevent relitigation of tax issues; section 6330(c)(2)(B) concerns liability challenges that a taxpayer had an opportunity to raise, while 6330(c)(4) applies to all issues that were actually disputed. The Court determined appellant had an opportunity to challenge liability under 6330(c)(2)(B) because regulation 26 C.F.R. § 301.6330-1(e)(3), Q&A-E2, provides that the availability of a preassessment conference with the Office of Appeals qualifies as an “opportunity to dispute” one’s tax liability. Further, the Court noted that administrative hearings are not categorically excluded from qualifying as “an opportunity to dispute” because the plain language of section 6330(c)(2)(B) does not require a “judicial opportunity.” The Court also determined that section 6330(c)(4) does not apply only to collection issues, but applies to liability issues as well. As such, Section 6330(c)(4) also barred appellant from challenging his liability in the CDP context because appellant previously raised the tax liability issue in his hearing with the Office of Appeals.

Accordingly, the Court affirmed the decision of the Tax Court that appellant was prohibited from disputing his liability a second time.